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Fraud*According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain*As defined in Wikipedia

Thursday, October 20, 2011

Just how does Goldman Sachs get so rich that its actions rule the economy? In the biggest understatement of the year, The Street labels an article thusly: Fed Too Chummy With Goldman Sachs, GE. You think? Then the article goes on to name the conflicts of interest which are conveniently overlooked by everyone including the government, the regulators, the Federal Reserve and the Government Accountability Office itself. Apparently, the GAO has investigative powers too.

It should be said that "conflict of interest" does not describe what is going on between the banks and the so-called regulator. It is corruption that best describes the present system of regulation of the banks by the Federal Reserve.

It is not just enough to audit and say, Well, there's a conflict here. Make some attempt to get those directors who run Wall Street Banks out of the Federal Reserve. Get rid of everyone at the Federal Reserve and start over or Get rid of the Federal Reserve.

Euphemisms abound in the article. "Reputational risk" means corruption; "appearance of conflict" is a violation of the system of regulations and should be prosecuted; "rigorous procedures to ensure full compliance" means that banks and GE will go ahead and do what they want to do.

Get some backbone, GAO! No waivers! No leniency! Close down Emergency Lending to banks with so-called "conflicts of interest." The whole organization is full of conflicts.

NEW YORK (TheStreet) -- The Federal Reserve needs to take steps to control the conflict of interest involving Reserve Bank directors that also run some of the largest Wall Street banks and U.S. corporations, including Goldman Sachs(GS_) and General Electric(GE_), a government audit report on Wednesday said.

All 12 Reserve Banks should "clearly document the roles and responsibilities of the directors, including restrictions on their involvement in supervision and regulation activities, in their bylaws," the GAO (Government Accountability Office) recommended.

The audit found that Reserve Bank directors often serve on the board of financial firms that the Fed regulates, creating the "appearance of conflict" that posed a "reputational risk" to the central bank.

The report cites instances during the financial crisis that spurred allegations of conflicts of interest. One example was in September 2008, when the then- chairman of the New York Fed's board of directors, Stephen Friedman, was also a board member and shareholder of Goldman Sachs, which had applied to be converted into a bank-holding company in response to the crisis.

In October, the New York Fed requested waiver on behalf of Friedman, but was unaware that he had bought additional shares in Goldman through an automatic stock purchase program. The waiver was granted in January. Friedman later resigned in May.

Goldman and other large firms were recipients of billions of dollars of funding during the crisis. The GAO identified at least 8 former and current Reserve Bank directors who were affiliated with institutions that used the central bank's emergency program.

JPMorgan Chase(JPM_) CEO Jamie Dimon served on the board of the New York Fed when the bank received emergency loans from the Fed and served as clearing house for its emergency loan program.

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COMMENTS:

ROGUE
said...

Rogue Government Traders

Any of this sound familiar? Yes of course it does. Unfortunately for all of us, the story of Barings bank and Nick Leeson is merely happening on a global scale. However, rather than one trader making bad bets what we are dealing with is a gigantic credit bubble ponzi scheme created by TBTF banks, or as Bill Black more appropriately refers to them, Systemically Dangerous Institutions (SDIs) that now needs to be covered up. This ponzi first started unraveling back in 2008 and rather than deal with it the best we could, global “leaders” decided to bail them out with taxpayer money and guarantees. What did we get for this act of kindness? A dead economy, monstrous unemployment, 15% of Americans on food stamps and a frightening reality that shows Americans are having a much harder time than the Chinese putting food on the table. See this article http://www.shtfplan.com/headline-news/startling-survey-americans-are-str... Meanwhile, what did the banksters get? They consolidated even more power over their Washington D.C. puppets because now establishment politicians are “in” the doubled down Nick Leeson bet with Wall Street and of course they got record bonuses and no one was prosecuted.

This is how a nation descends from one of productivity and innovation to ruthless, corrupt feudalism in a very short period of time. My message for Americans follows up from my email of two weeks ago. The reason the liberal mainstream corporate media demonized the Tea Party is because it threatens the status quo. The reason the conservative corporate mainstream media demonizes Occupy Wall Street is because it threatens the status quo. These are textbook divide and conquer strategies being used on the American people. Do not fall for it. http://www.zerohedge.com/news/rogue-government-traders?

To Be With the 99%, President Obama Must Fire Tim Geithner October 20, 2011

In my last piece, I talked about how Tim Geithner’s job over the past five years has been to (a) print money, (b) give it to rich friends, and (c) deny everyone else legal and financial rights. This shows up everywhere, from the 0% you get on your savings account versus the insider information the rich get, to your lack of access to the Fed discount window. It’s a symptom of bought government, which I try to expose on our show every day. (You can help by signing our petition at GetMoneyOut.com. )

I find it laughable to hear President Obama’s spokesperson talking about how his campaign represents the 99%. For starters He’d have to fire Geithner, to prove he’s not the leader of a bought government. After all, it is Geithner who took a system indirectly rigged to profit the 1% at the expense of everyone else, and institutionalized and formalized it during a crisis.

Must-watch clip from the only news/opinion show I try to catch every night, Judge Napolitano’s Freedom Watch on Fox Biz. Mr. Napolitano does a great job explaining the fundamental flaws with the current banking system.

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